Caplan vs. Sowell

A commenter points to Bryan's critique of A Conflict of Visions, which makes a number of good points. Bryan concludes,

What really puzzles me is why Sowell did not try a much simpler typology. Why not simply distinguish between advocates of laissez-faire, free-market policies on one pole, and advocates of government control on the other pole? _This_ dichotomy is unable to accomodate left-wing anarchists, but almost every other ideology fits neatly into place. Of course, this typology fails to capture the "underlying assumptions" of the two polar views. And it fails to do so for a simple reason: each of the polar views has supporters with a wide range of underlying assumptions.

I think that the differences between Sowell's outlook and Bryan's outlook are interesting. A few observations.

1. Bryan would favor open immigration and not favor strong national defense. Sowell would take the opposite positions.

2. Sowell has an unremitting lack of faith in the superior moral wisdom of the elites. In his view, they do not have the superior wisdom that justifies elitist exercise of power. This skepticism is an essential component of the "constrained vision."

Bryan keeps harping on how support for free trade is an elitist view, correlated with education. The implication is that Bryan would prefer elitist government, at least on the free trade issue, which puts him more in the "unconstrained vision" camp.

I think that Sowell could counter that the elite support for free markets is shallow. Everyone supports markets when they work the way you want them to. The crux of the issue is what you do when you encounter markets that deliver what you think are sub-optimal outcomes. At that point, Bryan's well-educated friends with the unconstrained vision abandon free-market policies in favor of social engineering. Only Sowell's friends with the constrained vision stick with markets when the going gets tough.

3. This shows why underlying assumptions really are important. In the unconstrained vision, the underlying assumption is that a social optimum is possible if wise leaders make the right choices. When the right choice is to let the market work, then let the market work. If the right choice is to fix the market failures in banking, education, health care, energy, the automobile industry, unemployment...then fix, fix, fix.

In the constrained vision, the people doing the fixing are no wiser than the people being fixed. In fact, the people doing the fixing lack important local and historical knowledge.

4. Bryan thinks that libertarian anarchy is a reasonable ideology. Sowell would regard it as an unconstrained vision, because it assumes that people are basically nice, so that in the absence of a state they would all get along. Sowell probably would be more sympathetic to the view of North, Weingast, and Wallis that social order is inherently fragile. According to NWW, in most situations, peace only comes about when violent elites can agree on a stable split of economic and political power. Occasionally, this "natural state" evolves into an "open-access order" in which many people have rights of economic and political participation.

5. My own view is that the constrained and unconstrained visions are held by elites. The masses operate on the basis of what I call folk beliefs. Elites compete for power by appealing to and manipulating these folk beliefs. At the moment, I believe that those elites who hold the unconstrained vision are at an advantage in making such appeals. Arguably, they have had an advantage for nearly a century.

Some quotes from A Conflict of Visions:

Where knowledge is defined, in the constrained vision, to include vast amounts of unarticulated but vitally important information and conclusions, summarized in habits, aversions, and attractions as well as in words and numbers, then it is far more broadly spread through a society than when its definition, as in the unconstrained vision, is restricted to the more sophisticatedly articulated facts and relationships. The constrained vision, which sees severe limits on man's conscious rationality, relies heavily on evolved systemic processes to convey and coordinate the broad array of knowledge...The unconstrained vision, which sees greater prospects for human mastery of knowledge, sees in those with special intellectual skills both the proof of its assumptino and the vehicles of knowledge and reason for promoting social improvement...

the very concept of "social science," which largely originated among those with the unconstrained vision...is often viewed skeptically by those with the constrained vision...

Social decisions are deliberately made by surrogates on explicitly rationalist grounds, for the common good, in the unconstrained vision. Social decisions evolve systematically from the interactinos of individual discretion, exercised for individual benefit, in the constrained vision--serving the common good only as an individually unintended consequence...

Adherents of both the constrained and the unconstrained vision each see fascism as the logical extension of the adversary's vision...Inconsistent and hybrid visions make it impossible to equate constrained and unconstrained visions simply with the political left and right...libertarians are identified with the tradition exemplified by F. A. Hayek and going back to Adam Smith, they are in another sense closer to William Godwin's atomistic vision of society and of decision-making dominated by rationalistic individual conscience than to the more organic conceptions of society found in Smith and Hayek...were reason considered just a little less potent, or selfishness just a little more recalcitrant, the arguments and vision of Godwin could be used to support socialism or other radically redistributionist political philosophies...

[according to the unconstrained vision, the path to peace involves] more influence for the intellectually or morally advanced portions of the population...better communications between potential enemies...a muting of militant rhetoric...a restraint on armament...a de-emphasis of nationalism or patriotism...and negotiating outstanding differences with potential adversaries. [On the other hand, for those with the constrained vision, the path to peace involves] raising the cost of war to potential aggressors by military preparedness...arousal of the public to awareness of dangers...promotion of patriotism...relying on your adversaries' awareness of your military power more so than on verbal communication...negotiating only within the context of deterrent strength...

in the unconstrained vision, individualism refers to (1) the right of ordinary individuals to participate in the articluated decisions of collective entities, and (2) of those with the requisite wisdom and virtue to have some exemption from either systemic or organized social constraints.

Comments and Sharing

On point 2, you say that:
'Bryan keeps harping on how support for free trade is an elitist view, correlated with education. The implication is that Bryan would prefer elitist government, at least on the free trade issue, which puts him more in the "unconstrained vision" camp.'

I think that's insufficiently nuanced. Bryan would prefer the unconstrained result of individuals NOT interfering with trade between other individuals. He has also found that elites tend to hold that view. That isn't the same as preferring the unconstrained vision of more decisionmaking capability available to the elites.

Point 5 is a very important point, which is highly under-appreciated.

Point 4 has two components. First, it captures a big part of the difference between Sowell and Caplan's approaches. Second, it isn't really fair to the an-cap position.

However, there is no part of the anarcho-capitalist position that suggests that people are nice and so will live together nicely. Rather, it suggests that incentives in an AnCap system are such that not living nicely is so high a cost that it will be avoided roughly as much as it is now.

It appears to me that we are near the cusp of a push for climate tariffs against China and India, and while latent support for tariffs exists among the non-elite, this push has not come from the grassroots.

Sowell's answer to point 5 seems to be to write lots of books and articles that spread the Tragic Vision and encourage people to elect conservative politicians and officials. I don't think I've ever seen him suggest any kind of institutional change.

"the underlying assumption is that a social optimum is possible if wise leaders make the right choices."

I think this forces a dilemma when it really should be at least a trilemma. I think it's entirely possible that one could conclude that some market or other social outcomes seem less than optimal, for understandable theoretical reasons (e.g. agency costs), backed up by empirical data. Yet nonetheless one could oppose certain interventions because the interventions themselves are not supported by theory or evidence, or perhaps because of moral/ethical considerations.

"Social decisions are deliberately made by surrogates on explicitly rationalist grounds, for the common good, in the unconstrained vision. Social decisions evolve systematically from the interactinos of individual discretion, exercised for individual benefit, in the constrained vision--serving the common good only as an individually unintended consequence..."

OK fine, but in this framework, it almost sounds as if by definition we can't evaluate the relative merits of the constrained vision because it is not subject to measurement.

"The masses operate on the basis of what I call folk beliefs. Elites compete for power by appealing to and manipulating these folk beliefs."

Doesn't any counterparty in a transaction involving asymmetric information try to compete to for power or wealth - everything from acai berry testimonials to financial services industry sales people convincing to borrow under terms which are not in their interest?

"At that point, Bryan's well-educated friends with the unconstrained vision abandon free-market policies in favor of social engineering. Only Sowell's friends with the constrained vision stick with markets when the going gets tough."

Again this seems to be forcing one or the other when there is a third option. Presumably the theory that justifies markets comes with necessary preconditions, and theories of market failure describe conditions under which those failures occur, and policy wonks have some collection of tools that may help. Maybe those theories are still relatively crude, but they still encapsulate the best we collectively know (in a formal, explicit, sense).

If a particular market is perceived to suffer from severe problems that I might read about in Freakonomics, and it is widely understood that outcomes can be improved by one or the other interventions, then as long as the choice is made in a reasonably representative way, why not? Why should this be any different than opposing interventions in the case where the same thought processes lead one to conclude that a market is working efficiently? And why isn't any other position essentially just ideological bias, since by definition you are not using the theory and the data?

I am often puzzled by Caplan's views. He sometimes seems a free market type, but then pops up with some strong statist intervention views. Your characterization of him as an "unconstrained" type is quite helpful in figuring out the puzzle.

Also, I am quite shocked by the overwhelming prevalence of the unconstrained view among economic professors. Example: The Economist's Voice, which claims to have made the short list for "best" economic journals. As those guys take over, there is no hope for any freedom in markets and life. They've seized the commanding heights and are proceeding to grab everything else.

After reading Bryan Caplan's critique, I'm left with the conclusion that he comes up short. While he does raise a few worthwhile points, his overall case remains generally unconvincing.

As a quick example, Caplan declares Sowell's thesis logically inconsistent with the following example; "suppose that the constrained visionary encounters a society in which the unconstrained vision reigns supreme. He could not advocate changing this society on the grounds of tradition or the accumulated wisdom of the society; for according to the traditions and accumulated wisdom of this society, the unconstrained vision is correct. But suppose that the constrained visionary decided to give in and support the institutions of this society. Once again, he faces a basic contradiction: for in this case the constrained visionary must abandon his commitment to the individual as the proper locus of discretion."

This is all well and good. But Sowell's thesis was about visions of society as they actually have occured, not visions which would apply to hypothetical societies which never actually existed. After all, it would be a simple matter to think of a hypothetical society which wouldn't fit Caplan's prefered typology of free market anarchist vs central planning statist. Caplan raises an interesting thought experiment, but it is essentially irrelevant to Sowell's thesis.

I don't want to pick apart Capalans critique here piece by piece; that would take far too long and I'm too boorish a writer to make it interesting anyways. But although he does raise some good points and some interesting questions, overall his review seems like a classic case of someone who "can't see the forsest because of the trees."

(Not strictly relevant, but I'm curious. Sparta, when has Caplan come out in favor of major statist intervention? I'm not familiar with any occasion where this has occured, but this could just be a gap in my reading.)

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